David Lewis
CEO & Executive Director
Good morning, and welcome to the Diageo interim results presentation. As you know, it’s my first results session for Diageo. In fact, this is my seventh week, and I’ll share a few initial impressions and immediate priorities with you later. But first, I’d like to hand over to Nik to share with you the results of the first half of 2026. Nik?
Manik Jhangiani
CFO & Director
Thank you, Dave, and welcome to Diageo. In the context of a continued challenging macro environment and industry backdrop in many of our markets, but in particular, U.S. spirits and Chinese white spirits, both organic net sales and organic operating profit declined 2.8%. Notably, excluding the impact from Chinese white spirits, we would have reported organic net sales down approximately 0.5% and approximately 1.5% growth in organic operating profit.
Europe, LAC and Africa delivered strong growth, but this was more than offset by NAM and APAC. Our focus on cost savings benefited organic operating profit but did not offset lower gross profit given the mix of market growth. This profit decline as well as lapping the impact of the disposal of our businesses in Ghana and Nigeria impacted our EPS pre-exceptionals, which declined 2.5%. Our focus on cash delivery continues, delivering just over $1.5 billion in free cash flow for the half year, but $164 million lower than last year due to adverse movement in working capital.
We have also declared a dividend today of $0.20 per share and at the same time, announced that we are moving to a dividend payout policy of 30% to 50%. This decision is not something that
